Why Summers Struck Out

17 September 2013 |permalink | email article

Some presidential advisers, including those closest to President Obama, argued that Larry Summers brought crisis management experience and a working knowledge of financial markets that Janet L. Yellen lacks. So did Ben S. Bernanke when President George W. Bush selected him as the Federal Reserve chairman. Obama set the wheels in motion for Summers by assigning Rob Nabors, a deputy chief of staff, to work with him, and recruited two fomer campaign consultants, Jim Messina and Stephanie Cutter to talk him up with the press. Summers, who pulled out of contention on Sunday to run the Federal Reserve, had alienated a bloc of liberal Democrats on the Senate Banking Committee, requiring horse-trading with Republicans.

Stock markets soared on Monday on the withdrawal of Summers. Many investors regarded Summers as less committed to the Fed’s monetary campaign than Ms. Yellen who now becomes the presumptive nominee for the top job at the Fed. Her supporters waited with a mixture of elation and apprehension for the president’s next step. Sen. Elizabeth Warren, a Massachusetts Democrat was one of those warning the White House against Summers nomination. 

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